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Monday, April 16, 2012

Apple trading dynamic

Apple is currently at levels I thought it would be in if they produced a blah quarter or wall street focused on just 1 or 2 metrics. (Like weak margins.)

If independent analysts have projected eps to be near $12 eps, yes 12. That is roughly a 40% beat from Apple's own estimates. If Apple does 12, they will have a trailing multiple of 15 when the stock is at 610.

If wall street analysts are correct, and Apple produces 9.89 eps, the stock will have a trailing multiple of 15 at a stock price of 580.

Apple should produce numbers in between the two, but independent analysts have been far more accurate projecting earnings.

Where can Apple trade?

Technically, AAPL is currently at support.

Historically, after a run up, AAPL has a tendency of chilling to its 10SMA, then continues to trend higher. Given its run, the consolidation would not surprise me.

Some chartist would point to the trend line as a potential support area. But, in my most humblest of opinions, the only way Apple sees the upper trend line is if they do not meet analyst expectations or there is a real financial systemic shock.